Mast Therapeutics (MSTX) Stock: EPIC Primary Endpoint Missed!

Update 9/20/2016 2:12 Primary Endpoint Missed

A press release was just offered showing that MSTX missed its primary endpoint in the clinical study discussed in this post. In response, Brian M. Culley, Mast Therapeutics CEO, had the following to offer:

“We are exceedingly disappointed with these top-line results. While clearly not the outcome we wanted, we believe the insights and data from the largest placebo-controlled clinical trial ever completed in sickle cell disease will substantially advance the understanding of vaso-occlusive crisis and the still maturing clinical science necessary to support the development of new therapeutics for this debilitating disease. We wish to reiterate our sincere appreciation for all of the patients, caregivers, and others who aided us in conducting this informative study.

These analyses are limited to just top-line data, so, in the coming weeks, the company intends to review the full data set from EPIC. In addition, we plan to perform an interim analysis of the ongoing heart failure trial of vepoloxamer. Consequently, while we evaluate our options, we intend to significantly and immediately reduce our operating expenses and continue our efforts with AIR001, our lead asset in heart failure with preserved ejection fraction, which currently is the subject of a 100-patient phase 2 study expected to complete enrollment by the end of 2017…”

Mast Therapeutics Inc (NYSEMKT: MSTX)

Mast Therapeutics has been an incredibly interesting stock to watch as of late, and for good reason. Investors have mixed opinions with regard to the results that should be coming any time from a recent clinical trial. Today, we’ll talk about why investors have mixed opinions, what I’m expecting to see from the data, what we’re seeing in the market, and what we can expect to see moving forward. So, let’s get right to it.

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Why Investors Have Mixed Opinions With Regard To The MSTX Study

We all know that Mast Therapeutics is working on a treatment known as Vexolaxamer. At the moment, the company is looking over the results of the EPIC trial and should be releasing those results relatively soon. These results are overwhelmingly important. After all, if the results of the EPIC trial are positive, MSTX will have a new treatment that’s tremendously close to reaching the market. However, if things go bad, the company will have spent massive amounts of time and money on a failed product. To add insult to injury, the company would have to pay back $10 million in loans immediately if the results missed the primary endpoint. So, with so much on the line, there are definitely going to be strong opinions on both sides.

There’s also a bit more to the mixed opinions surrounding MSTX. You see, if the results were released in a timely manner, the bears would have been relatively silent in the process. However, the results haven’t been released. In fact, they are months late. Because of this, some investors believe that the results will be overwhelmingly negative and that now is the time to get rid of the stock.

What I Think We’ll See

First off, I have to say, the bearish view is definitely understandable. Mast Therapeutics should have released the study data quite a while ago, and the delays are becoming overwhelmingly concerning. However, I don’t believe that the release of the EPIC trial results will be dooms day for the company.

I’ve paid attention to stocks in the pharmaceutical space for some time, following several trials in the process. One thing that I’ve noticed is that when results are overwhelmingly positive, or overwhelmingly negative for that matter, they are released relatively quickly. When we see delays is when we see a bit of data in that gray area that’s not good or bad but needs to be defined as black or white. With that said, I’m not expecting the data released by MSTX to be overwhelmingly positive or overwhelmingly negative. I’m expecting to see results that are somewhere in the middle, but I do expect the primary endpoint to be met.

What We’re Seeing From The Stock Today

At the moment, MSTX is on the downtrend. With uncertainties surrounding the EPIC trial, this is understandable. Currently (12:21), the stock is trading at $0.58 per share after a loss of 1.31% thus far today.

What I’m Expecting To See Moving Forward

Overall, my opinion with regard to Mast Therapeutics is a relatively bullish one. While I understand the concerns revolving around the EPIC trial, if the data was overwhelmingly negative, it would likely have already been released. With that said, I will be patient as the company continues to analyze the data. With regard to the trial, I’m expecting that MSTX has something incredible here, and that the trial results will show that. All in all, while things are taking longer than some would like, the stock is looking more and more like a strong investment option.

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